Tuesday, March 13, 2012

Did the British Columbia government botch another billion-dollar deal?

Some of the biggest companies in Canada think so. Could this ultimately be at the root of the cancellation of the Telus naming rights deal for B.C. Place Stadium?

Bell, Rogers and Shaw have accused the B.C. government of unfair tendering practices. They allege that the direct award of the government's $1 billion, 10-year long distance, voice, data and mobile phone service contract to Telus violates national and international free trade agreements and even the government's own regulations!

This is what happened. The government issued a Negotiated Request for Proposal for its Strategic Telecommunications Services Procurement Project on Dec. 22, 2008. Just over two-and-a-half years later, the government suddenly halted the process of tendering nine "bundles" of work, took a 180-degree turn and gave Telus the whole enchilada, as they say, on June 29, 2011. The government and Telus have spun this as an economic generator that will improve mobile phone service and Internet access in rural B.C.

"When Telus was the successful bidder on all nine individual bundles of services in the NRFP as well as on the total package of combined services, it became clear to government that, instead of awarding the bundles separately, a stronger partnership with Telus could realize a greater overall benefit to families and businesses in B.C." says the news release.

The deal includes a two-year renewal option, so Telus could make $1.2 billion by the end of the term. Unsuccessful bidders had until July 13, 2011 to file complaints and, boy, did they ever!

Did the B.C. government cancel the Telus naming rights for B.C. Place (directly or indirectly) to distance itself from Telus, for fear of its competitors filing lawsuits and complaining to international trade tribunals?

Consider the following excerpts of complaints to government:

Mario Belanger, senior vice-president of sales, Bell Canada:

"Bell believes the implications of this decision reach well beyond the Ministry in charge of the NRFP. The decision has serious implications with respect to provincial, inter-provincial, national and international trade policy and existing and future trade agreements. The decision runs contrary to the Province's Agreement on Internal Trade (AIT) and Trade, Investment and Labour Mobility Agreement (TILMA) commitments. The decision is based in part on an assessment of Telus's capabilities as the only provider who could ofter the services.

"This assessment is not consistent with the regulatory framework for telecommunications in Canada, and has not been tested by a competitive bidding process. The decision runs contrary to the duty of fairness owed to all bidders participating in a competitive procurement process.

"The decision will have a material adverse effect on the availability of competitive communications services in the Province for consumers, small businesses, governments and enterprises.

"Once the B.C. Government determined its own procurement process was not going to prove satisfactory, the entire procurement process should have been cancelled. Then the B.C. Government would have been free to retender for services under a new procurement process that allowed for companies to explore various options such as forming consortiums.

"The lack of an open and transparent procurement process reduces the B.C. Government's ability to ensure the best value for taxpayers. In addition, extending the scope without prior notice eliminates the opportunity of the B.C. Government to evaluate the benefits of future technological innovation, lower costs, or investment that could be provided by Shaw, or a consortium of industry bidders. This limits the B.C. Government to only the services and hardware of one vendor.

"Shaw objects to the fact that it took a two-year procurement process to arrive at NOI #4015, and then only two weeks were allowed for filing objections to this process."

Gordon LaFortune, Gottlieb and Associaties, lawyer for Rogers:

"The size and scope of the contract awarded to Telus is extraordinary. As a result of this award, Telus would be the sole provider of telecommunications services to the Province of British Columbia for 10 years. The range of services and covered government entities is so broad that no other supplier, including Rogers, would be permitted to provide telecommunications services during the currency of this contract.

"At the end of this period, Telus would have such an overwhelming advantage as the incumbent supplier that it is unlikely that it could be displaced even if the province put the telecommunication requirement out to tender. Therefore, by awarding such an extensive contract to Telus, the Province effectively grants Telus the contract in perpetuity."

Monday, March 12, 2012

Any Canadians expecting the gold medal dominance of their Vancouver 2010 Winter Olympics team to translate into improvement for the London 2012 Summer Olympics team will be disappointed if predictions released March 12 come true.

Moose Jaw, Saskatchewan-native Daniel Johnson, an economics professor at Colorado College in Colorado Springs, Colo., predicts Canada will win 17 medals, including four gold, in London. That was also his prediction for Beijing 2008. The actual tally four year ago was 18 medals and three gold. Not too shabby, eh?

Well, maybe if you're the Canadian Olympic team. That would put Canada in 15th on the gold medal scale and 12th overall. On overall medals, Johnson predicts Canada will be surpassed by Netherlands and Hungary (19), Italy and Japan (31), Australia (38). On the gold medal scale, he believes India, Poland and Netherlands will win 5. Romania (6), Hungary (7) and Australia (8), he predicts, will also beat Canada.

Johnson boasts a remarkable 93 percent success rate in his Olympic predictions over six consecutive Games, and his model does not include athletics. He instead relies on a nation's per capita income, population and its proximity to the host city.

Johnson predicts the U.S. will win the most overall (99) and most gold (34). China (67 including 33 gold), Russia (82 including 25 gold), and host Great Britain (45 including 20 gold) are the top four. According to Johnson's March 12-issued news release:

"During the last Summer Games, in Beijing in 2008, Johnson’s model forecast that the U.S. would top the medal count, and it did, winning 110 medals (seven more than predicted). He also correctly predicted that China would top the gold medal count, and it did, winning 51 gold medals (seven more than predicted). During the last Winter Games, in Vancouver in 2010, the model predicted 27 medals for Canada (they won 26 instead), but the American and German teams both vastly outperformed expectations and topped the podium more often."